in futures and options, trader can create short for more than a day, no need to pay entire money, profit and loss can be realized. in call, both buyer and seller have rights and obligation, but in option only buyer has righets with no obligation and seller has obligation with no rights.
premium is decided by both buyer and seller mutually. physical settlement- getting shares by buyer in spot market. Cash settlement- getting money by seller in spot market and monetary compensation was given to traders in futures and options.
rather than buying and selling shares today, both buyer and seller decide to buy and sell in the future on a specific date by paying caution deposit.
margin- caution deposit collected from both buyer and seller to sign future contract. Mark to market- profit and loss made by buyer and seller on the basis of MTM. Premium- money given by option buyer to seller to sign the agreement. Strike price- agreed price by both buyer and seller in option market. Expiry date- last date of settlement date. Lot size – number of shares available for agreement in derivative market
, , Futures and Options, Call option, Cash Settlement, derivative market, Margin / MTM / Premium / Strike Price / Expiry Date / lot size, physical settlement, Put Option, spot market
